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Saturday, August 25, 2012

Weekend Portfolio Analysis (08-25-2012)

Finally we had a little more fun this week. With more movement, and some conviction on that pull back from SPX 1426 to 1398 Tuesday through Friday, and then some recovery to end up the week with a -0.4% performance for the S&P500. So, not the end of the world, and apparently a scenario that still favors neutral traders.

Tuesday, August 21, 2012

September RUT Bull Put Spread

Demo-trading:
SELL 6 RUT September 780 Put (@4.60)
BUY 6 RUT September 775 Put (@4.00)

September RUT Bear Call Spread

Demo-trading:
SELL 6 RUT September 860 Call (@2.30)
BUY 6 RUT September 865 Call (@1.65)

Sunday, August 19, 2012

How to measure a system's edge


Many traders and authors out there constantly say things like "You need a system with positive edge", "You need to trade with odds on your side". But very few people make a more serious effort at going deeper. What does it mean to have a positive edge? and more importantly how do we measure and mathematically demonstrate that a given strategy has a positive edge?

Saturday, August 18, 2012

Weekend Portfolio Analisys (08-18-2012)

Once again we had a stubborn market this week. Still low volumes and a market able to apparently shake off bad news, or not so good releases. On Thursday, SPY moved up to finally break the tight range 139 - 141.40 where it had been trading for the last few days.

Sunday, August 12, 2012

Weekend Portfolio Analysis (08-12-2012)

Boring week in the markets with slow movements and light volume being the central topic. The week resulted in 5 consecutive little green days that moved the S&P500 by +1%. Now, let's analyze the positions in the portfolio.

Sunday, August 5, 2012

Weekend Portfolio Analysis (08-05-2012)

It was mostly a bearish week until Friday came with that huge reversal candle. Overall The S&P500 gained around 0.5%. Now with the busiest week of the month in terms of news behind, and earnings season winding down this might very well be a boring month ahead of us. Summer markets tend to be a little boring at times lacking conviction and volume, so you have to be very careful with your trade set ups and your position sizes.

Wednesday, August 1, 2012

How to lock in profits on an options trade and stay in the position

How to lock in profits on an options trade and stay in the position

Many times you have a winning position on an option trade, and you would like to lock in some profit but stay somehow in the game because you feel there is potential for more. You know there is potential for more but you have that internal fear of losing the gains you have up until now.